Ways to Save On Credit Card Processing Fees

The way people shop and pay for products and services has evolved; more consumers are using credit cards instead of cash so businesses need to be able to accept a variety of payment methods. For businesses in certain industries, however, it can be difficult to get approved for a high-risk merchant account. Unfortunately, higher processing fees are another one of the challenges high-risk businesses face. With the right merchant services provider in your corner, though, you can save more on credit card processing fees and allow your high-risk business to thrive.

 

Credit Card Processing Fee Savings Tips

Besides being tagged as a high-risk merchant, credit card processors can raise your rates depending on a number of factors regarding how your business processes payments. The experts at First Card Payments share a few tips that will help you lower credit card processing fees so they won’t eat up your profit.

 

[1] Don’t Just Choose the Cheapest Processor

When you’re trying to save on credit card processing fees, the cheapest is always the easiest route and something businesses often look for in a payment processor. But you have to remember that a payment processor with the lowest processing rates isn’t necessarily the least expensive overall. In fact, a lot of these companies have hidden fees and you end up paying more every month. Instead, look for a processor that is transparent about their rates as well as the fees for their services so you know what to expect instead of being blindsided.

 

[2] Generate Substantial Funding

Substantial capitalization is still one of the best ways to prove your credibility to payment processors. When you have sufficient money in the bank, this tells them that you can finance your business and you can consistently pay any dues.

Having substantial funding is especially important when you’re a high-risk merchant because it gives you a better chance of getting approved. Additionally, a payment processing company is more likely to charge you less knowing that you are capable of paying them promptly.

 

[3] Learn About Different Credit Card Processing Models

Reducing credit card processing fees is just as important as generating revenue if you are a high-risk merchant. And one of the best ways to do that is by understanding the different processing models to determine which one will fit the needs of your business best.

A flat-rate model offers a fixed percentage transaction fee regardless of the amount. This is the easiest pricing model to understand but it also tends to be more expensive than other options.

Interchange-plus pricing is that extra cost you need to pay to Visa, AmEx, MasterCard, and Discover with every transaction. This is the cheapest option but accounting can be tricky.

Tiered pricing is the most common model because it’s a mix between flat-rate and interchange-plus pricing models; all transactions are charged a flat rate depending on which tier they fall under. This is considered the most beneficial because it allows you to enjoy the transparency of interchange-plus and the predictability of flat-rate pricing.

 

Credit Card Processing Fee Savings with First Card Payments

Finally, you need to get your processing history right because a lot of payment processors will look at how you processed payments in the past to determine if they will underwrite your business or not. With a good processing history, it’s not only easier for you to get approved and allow you to save on credit card processing fees but it will also help you obtain a low-risk merchant account in the future if you continue to do well with your transactions. 

Contact the experts at First Card Payments to learn more about high-risk credit card processing tips as well as the merchant services we offer. You can even sign up for a new merchant account and save 25% instantly when you call First Card Payments at (877) 441-6801.